Clorox is a multi-billion dollar global organization that is best known for its namesake bleach and cleaning products. As one can imagine, given the increased need to sanitize spaces and surfaces during the COVID-19 pandemic, demand for Clorox products grew substantially during 2020.
And as we have seen throughout the pandemic, resilient supply chains have been critical in enabling companies to respond to changing demands and volatile market conditions.
Thankfully for Clorox, it started on a journey a couple of years ago to move away from legacy planning tools that relied on spreadsheets and batch processing, towards a fully dynamic, digital, real-time supply chain planning platform with Kinaxis.
Speaking at Kinaxis' Big Ideas in Supply Chain event this week, Kirk Niehaus, VP Global Planning and Supply Chain Technology at Clorox, explained how the company has moved its core US businesses onto Kinaxis, which is giving P&L real-time visibility into supply chain planning.
Clorox has a business strategy that focuses on four key components - fuelling growth, innovating experiences, reimagining work and evolving its portfolio. Niehaus said that the move to Kinaxis and the digitization of its supply chain is supporting the reimagining work and fuelling growth elements of this strategy.
Clorox's digital supply chain is made up of transportation management, warehouse management, quality management, digital factory systems, manufacturing execution systems, improving supplier integration, as well as orchestration of robotic process automation.
But it was planning that had to be tackled first. Niehaus said:
A global planning tool was the first plank in the Digital Supply Chain Network initiative. Good planning capability is the most important first step. I like to think of global planning or planning in general as the brains of the operation, manufacturing as the arms and logistics as the legs. So it's not by accident that investing in a new global integrated digital planning tool was the first step in the digital transformation of our supply chain.
Niehaus said the pain points Clorox was experiencing with its previous supply chain planning tool were largely as a result of outdated technology, which wasn't fit for the digital age. He explained:
We really only had one planning tool… and it was literally last century's technology. The code was written in the late 1990s, lots of data latency, lots of batch processing, and not a nice platform. Essentially, it's not digital.
And what we needed was a tool that is out of the box, easily configured for all the different supply chains, be very user friendly, and be able to be connected to lots of different systems of record and other systems that we use in supply chain.
Clorox initiated a two year assessment for different planning solutions and whittled its list down to 11 vendors. From those, after conducting more research, the final list came down to three contenders - of which Kinaxis was one. From this point, Clorox carried out a small pilot with each of the final companies to test with users which was going to be the most effective. Niehaus said:
We asked those companies to put some of our business data from one of our businesses into the tool and to let us test drive it for a couple of weeks. That meant having planners in it every day, learning, exploring, understanding how the tool went. Was it user intuitive? Would they like to use it? As well as our technical IT folks assessing the technical capabilities, the configuration requirements, which would be necessary in order to bring it to life.
And by far, it was unanimous - every single planner, every single IT person said that Kinaxis was clearly the number one choice.
A data cleanse
Having established Kinaxis as the clear front runner, Clorox began a phased implementation in July 2019, bringing in different US businesses onto the platform over a number of months. The final cutover and go-live was carried out during the COVID-19 crisis and was all completed virtually, to much success. Niehaus said:
Now we have our core US businesses on the tool. And now we're continuing with our three year global implementation.
The key thing about this tool and what is really different from what we've done in the past, is that it is 100% governed by our planning Center of Excellence. What I mean by that is user administration, first level problem solving with the system, errors and issues - everything is done and led by the planning Center of Excellence, in close partnership with our IT technical side of the house. Previously, those kinds of solutions, all of our software, would be pretty much governed by our IT group. Today it's done much more in collaboration.
Niehaus knew that central to the success of the implementation would be Clorox getting its data in order. He said that when you're not ‘always on', disorganized and incomplete data can be overcome with manual processes - but this isn't what you want or need when thinking about real-time visibility. Niehaus said:
It's important to realize when you actually launch a digitally integrated tool, all of that data, and data currency, and having it accurate actually matters. When you're not connected it doesn't matter as much. When you are connected, it matters a lot. So we took a year to really go check our data, make sure it was clean and do the configuration for our US businesses.
The end goal for Clorox is to move towards concurrent planning. What does this mean? Well, it's an idea that has been advocated by Kinaxis for a while - and for Clorox it means shifting away from bifurcated demand and supply planning, which relies on collecting information on a monthly basis, and gaining real-time insights. Niehaus explained:
This is about the evolution of S&OP, which is all about getting your data, doing a demand alignment and constraining it with a supply alignment, having a consensus meeting, and then a GM brief to the P&L owner about what the business plan is. That capability was brought to life in the late 1980s, because of the personal computer and spreadsheets. So for the first time in history, you could put your production, your capacity, your business plan, your inventory, your sales, all in one place.
Today we can see production, we can see sales, we can see all the promotions - and all that information is entered, literally every day. So, it's real time, and live and accurate, every day. Now we have the dashboards enabled in order to see that. That's different from what I would call monthly decision making or scheduled monthly decision making.
Niehaus said that Clorox now has the ability to let the business drivers and demands dictate when the company updates its sales and operations planning process. He added:
No longer are we beholden to monthly scheduled decision making. Since completing the US businesses about 100 days ago, we've already started to convert businesses from literally hundreds of spreadsheets and system extraction and PowerPoint slides.
We've started to refer to this as an integrated collaboration platform, it's enabling us to deliver that business value that was at the forefront and the basis for our choice. Our ability to deliver double digit productivity, double digit improvement to inventory effectiveness. This tool is the basis for how we're managing our availability and customer service in these trying times and with demand during COVID-19.
Niehaus said that now a P&L owner doesn't have to wait for a monthly meeting to see how his or her business is performing. They can simply use dashboards to select their business unit, select a unit of measure, and select their budget horizon - all in real-time. He added:
No longer do they have to track down people to collect information and have people scramble to find out what's going on in the middle of the month - it's readily available to them right there in their live dashboard, whether it's on their computer or on their iPad or on their phone. It's right there in front of them. Instead of a spreadsheet or PowerPoint, they can see their dashboard live.
What's next for Clorox and Kinaxis? The plan is to adopt routine scenario planning, in order to build further resilience into the company's supply chain and operations. Niehaus explained:
The use of routine scenario planning is so powerful - I can't overstate how powerful it is to be able to create a digital twin and generate multiple ‘What If?' analysis in minutes, not hours or days. To be able to answer those questions about ‘What if?' - to understand, can we do it? What if we take that big order? What if we have a supply outage?
We're going to invest substantial resources and time into learning that skill and being able to perform that on a very regular basis. It's just super important for us as a planning team and being responsive to the business.
For more diginomica stories from Big Ideas in Supply Chain Summit 2021 visit our Big Ideas in Supply Chain event hub. The virtual event runs from June 1st-2nd and sessions are available to view on-demand until further notice. This is the event registration link.